Performance Management Disciplines
That however, is only the very base level of performance management. The real power of performance management is when it is extended beyond the budget to the organization’s strategic objectives and non-financial metrics are also incorporated to determine the organization’s ability to realize its strategy. Under this discipline, leading indicators (e.g. KPIs) of progress toward achieving the strategy are identified and tracked. If an indicator is lagging, action can be taken proactively to either correct the situation or adjust the strategy.
Another powerful extension of performance management is its business intelligence discipline. This normally takes two forms. The first is historical trend analysis, using actuals data and predictive analytics/algorithms to predict future behavior of a cost or revenue number. The second is the use of business driver models to project future performance based on changes to assumptions (e.g. forecasting, what-if scenarios).
Business activity monitoring (BAM) or operational performance management (OPM). With BAM/OPM, performance management principles are applied at a very low level in the organization. BAM /OPM looks for leading indicators (similar to the strategy focus, but at a much more detailed level) at the transactional or business event (e.g. process and system control points) level.
Performance Management Systems
- Business Objects
- Microsoft (Analysis Services)